PROVIDENCE – The Capital Good Fund is aiming to finance 2,000 loans to Rhode Islanders totaling $6 million in 2019.
To meet that goal, the Providence nonprofit is upgrading its loan origination and servicing systems to accommodate community demand, with help from Bank Rhode Island in the form of a $7,500 charitable grant, the bank said.
To streamline its process, Capital Good Fund is working to move its loan application portal from an outside vendor to one that will be managed internally. It is designed to create a more user-friendly experience to upload required documents, software to automatically pull bank statements with clients’ permission, integrated credit report data parsing and more.
As a U.S. Treasury Department-certified community-development financial institution, Capital Good Fund’s mission is to provide “equitable” financial services that can provide a pathway out of poverty for low-income, working-poor individuals and families.
Capital Good’s emergency loans program is often used by customers for unexpected expenses such as car repairs or to replace a broken water heater. The loans are an affordable alternative to payday loans, which typically have high interest rates that make it difficult for a borrower to pay off, resulting in lenders “rolling” the loan into a new loan and creating a cycle of debt, the Providence-based bank said.
It said Rhode Island allows payday lenders to charge up to 260 percent interest, but Capital Good’s emergency loans typically have a 12-month term, now available at 10 percent, a decrease from the previously offered 35 percent.
“Capital Good Fund has proven extremely successful in delivering services to Rhode Islanders that not only help to avoid what can become long-term debt traps but that help to improve their credit and future financial stability,” said BankRI President and CEO Mark J. Meiklejohn. “Their ability to reach more people who can benefit from what they offer would be a positive for our state and we’re happy to support what they need to make that happen.”
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.